You’ve worked hard your entire life, and now you’re thinking about retirement – or might already be retired. Seniors often face a need for additional cash flow that is greater than their pensions or 401(k) plans. Some worked hard their entire life, and now want to play just as hard. Some are facing high medical costs, or the need to purchase additional health and long-term care insurance. Where do you turn to serve any – or all – of these scenarios? Many are finding that the equity in their homes is a means to finance their needs.

The five main advantages of a reverse mortgage are:

1. Extreme Flexibility: There are few, if any, restrictions on how and where you spend the money you received from your loan. You can purchase long term care insurance, help pay for grandchildrens’ college or even travel – it’s your money, and your choice.
2. Easy Prequalification: You don’t have to fall within a specific income range to qualify for a reverse mortgage.
3. No Downside: You will never owe more than the value of your home at the time the loan is repaid – even if the mortgage lender paid you more than that. This means that if your home declines in value, you will not owe more than what it is worth.
4. Home Ownership: You live in your home for as long as you want; you are guaranteed a place to live.
5. Federally Insured: The Home Equity Conversion Mortgages (HECM) is managed by the Department of Housing and Urban Affairs and is federally insured. This means that if your lender defaults, you won’t be affected and will continue to receive your payments.

Our next post will cover the disadvantages that come with a reverse mortgage. Then you’ll be more prepared to discuss this loan option for yourself, or to provide this information to your adult parents. Grandview Lending has a Reverse Mortgage Specialist ready to help you with this decision.